Charles HandyThe Unintended Consequences of a Good Idea

I once lived and worked inside Windsor Castle. Our home was originally part of the palace of King John. It was from our courtyard that he rode out in 1215 to put his seal on the Magna Carta – an early version, perhaps, of a sort of stakeholder contract, one that, we should note, he agreed to only under extreme pressure.

I ran conferences there on societal ethics. I used to ask the participants to look around. There had been a castle and a monarch there for nearly a thousand years. The castle was still there and a monarch still resided in it; the sovereign’s flag still flew above it. But while things still looked the same on the outside, what went on in the inside was very different. Change, I suggested, was often easier if you kept the form but changed the substance when the world around you changed. I would then take them into the great and wonderful chapel of St. George across the courtyard, where the kings of England are buried. I would stand them beside the tomb of King Charles 1, the one whom we beheaded because he refused to change the substance of his role to meet the needs of a changing society.

Could the same fate befall the corporations that have served us so well in the past, I wonder, if they do not change their ways. They were wonderful social inventions back in 1550, when the twin ideas of the joint stock company and limited liability were first conceived and applied in Britain. But down the centuries those good ideas have had some very unintended consequences. To drive through the old communist countries of Eastern Europe, as I did this summer, is to see history recorded in the city skylines, a very visible example of the transfers of power in those countries. There are the old castles of the kings and barons, all museums now, or grand hotels. Then came the huge concrete edifices of the communist regimes, parliaments of the people today, but even these are hidden behind the glossy new glass towers of the corporate businesses. To the average passer-by it seems clear where the real power now lies.

They are full of paradoxes, those towers. Clothed in glass you can’t see into them. Proud symbols of the new democracies, they are as centrally controlled as the communist regimes they displaced. The names on their doors, often paraded on their rooftops, are, as often as not, a set of meaningless initials. To the layman, these are anonymous organizations, run by anonymous people, themselves the appointed agents of anonymous investors, represented, as often as not, by anonymous institutions in similar towers. You cannot blame that passer-by for thinking that power and wealth had somehow got out of his or her control, that somehow their concerns and those of the wider society were in danger of being ignored. That is, if they thought about it at all. Perhaps the real problem is that too many people don’t think that much about it, that they just assume it is the way it was ordained to be – just like slavery of old. That is not going to be the best starting point for a cultural change.